Economic Powers Vow to Fight Crisis

“The market got very bulled up on the idea of something happening today before markets opened,” he added.

Mr. Mnuchin, who participated in the G7 call, said the Trump administration is working with other countries to do everything possible to curb the spread of the virus and limit its harm on the global economy.

“The administration is closely monitoring the coronavirus and its effect on public health as well as any effects on supply chains, markets and the broader economy,” Mr. Mnuchin said at a hearing before House lawmakers. He said the White House wants to work closely with Congress on an emergency funding package.

President Trump on Monday night called on Democrats to pass a temporary payroll tax cut but Representative Richard E. Neal, the chairman of the House Ways and Means Committee, told Mr. Mnuchin that any stimulus package should be centered around infrastructure investment rather than additional tax cuts. Mr. Mnuchin said that infrastructure would be central to any such package.

“If there’s a need to stimulate the economy as a result of the coronavirus, I’m sure that infrastructure is a priority of the president,” Mr. Mnuchin said.

The mere fact that the G7 held an emergency gathering underlines what a fraught moment this is for the world’s economy. The coronavirus outbreak has torn across the globe, sickening about 90,000 people. While the vast majority of those are still in China, where the infections first surfaced, major outbreaks have also taken hold in South Korea, Japan, Iran and Italy, and cases are climbing in other countries. Six deaths have been reported in the United States.

The virus could exact a heavy economic toll in the G7 countries, as it leads to quarantines, shutters factories, and hits investor and consumer confidence. But central bankers have limited ability to act, because borrowing costs are already low across major economies.

Article source: https://www.nytimes.com/2020/03/03/business/central-banks-coronavirus-g7.html